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Market Commentary 04/05/16

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EUR/USD – Price Has Spiked The 1 Hour Demand Zone

The demand zone I said had the potential to cause the market to pause has been spiked, now we are seeing the reaction to the zone in the form of the candle for this hour currently being a bullish pin bar.

I don’t think this demand will cause another move up past the current swing which formed when the price began to fall, we might see a small move higher but I doubt it will last long. If we end up seeing the demand zone broken it may create a supply zone which we can use to get an entry short into this retracement.

For now watch the unfolding price action to see if a supply zone forms. If the price starts to move higher watch Oanda’s open orders graph to see if any buy stops start accumulating above the swing high at the top of the move lower, this current drop will have made many retail traders go short and the bearish pin bar we seen yesterday on the daily chart is likely to have been traded by many traders so their stops will probably be placed just above the high.

USD/JPY – New Higher High, Retracement Not Confirmed

Today USD/JPY has broken the swing high which I mentioned in my last post, it could be that this is the beginning of a larger retracement although the current price action needs to be monitored closely for this to be confirmed.

A large spike high occurred at the end of the US trading session last night, I’m not entirely sure why this took place it could have been a stop run although I don’t have open orders graph to confirm this. With a new high the market is suggesting the momentum is up for the time being, to be on the safe side I would recommend you wait until the new high is broken before looking for opportunities to get long.

Tomorrow if the high is broken mark the high as a breakout zone and watch for a retest back into the zone, it might provide us with a nice entry long and we’ll only need to use a small stop-loss.

AUD/USD – Profit Taking Beginning To Enter The Market

After yesterdays RBA announcement it was only a matter of time before we saw bank traders take some profits off their sell positions.

Tonight we have the retail sales and trade balance news coming out so we may see another move lower later, at the moment there isn’t really much to we just need to sit and wait for the news before making our next move. If the price does decline because of the news I don’t think it will be long before we see a retracement take place due to the amount of retail traders who will be entering short positions. If the price drops again the profit on the bank traders sell trades will be much bigger than they currently are which means they need far more sell orders to come into the market in order for them to take some profits off their positions.

Finding Supply & Demand Zones That Work!

How Old Supply And Demand Zones Do Not Cause The Market To Reverse And The Reason Why ﻿Traders ﻿Mistakenly ﻿Believe They Do

Why The Time It Takes For The Market To Return To A Supply Or Demand Zone Will Determine Weather The Zone Has A High Chance Of Causing A Reversal To Take Place

The Differences Between Zones Created By Bank Traders Taking Profits And Zones Created by The Bank Traders Placing Trades